What is Payroll Software? Key Functions | Advantages | Types of Payroll

Introduction

HR managers face difficulty when it comes to managing the payroll of employees as businesses start to grow it becomes a cumbersome task to keep up with processing of payroll in large numbers. Payroll is more than just processing monthly salaries, it encompasses calculating wages, tax deductions, ensuring timely benefit payment among employees.

However, businesses now seem to understand HR professionals' challenges as a result most businesses are shifting towards automated payroll software which will help HR managers to focus on more strategic functions rather than administrative work.

What Is Payroll?

Payroll is a process of providing fair compensation to the workforce according to industry standards. Payroll includes an employee's salaries, wages, incentives, bonuses etc. Payroll is not just a monthly task but it’s a system designed for compensation of employees starting from hiring to retirement. Thus, every business must maintain smooth payroll operations in order gain employee esteem and stay compliant with labor laws.

Whether you manage a small team or a large workforce, reliable payroll software like Runtime HRMS ensures your team is always compensated properly and on time.

Key Functions of Payroll Software

In this regard, modern payroll software's have changed how businesses deal with their financial issues.

1. Salary Calculation: Payroll software automatically computes employee wages whether they are permanent or based on hourly rates. This way manual calculation is eliminated, consequently your employees will receive their salary correctly including overtime and bonuses.
2. Tax Deductions: Apart from computation of salary, deduction of taxes is equally vital, and an automated payroll system does all the basic tax calculations and withholdings for items such as income tax, EPF and medicare. Timely filing of such items within government agencies thus avoiding chances of human errors and penalties related to non-compliances issue.
3. Time Tracking: With time tracking integration it becomes much easier to track employee working hours accurately. This way HR manager can have access to records of working hours of an employee including overtime that will automatically be factored into payroll process
4. Employee Records: Maintaining records of employees isn’t easy task if done manually there are possibility of records getting lost, but payroll software makes it simpler for HR by keeping comprehensive records on every employee’s earnings, deductions and administrative information. As a result, this helps obey labor laws and provides useful information for budgeting and auditing.

Ready to simplify your payroll? Let Runtime HRMS do the heavy lifting and take care of it for you! Click here: https://runtimehrms.com/payroll-software

Advantages of Payroll Software

Employing an efficient payroll system bring different advantages for businesses of all sizes:

1. Correctness: According to G2's top payroll statistics , human data entry accounts for 40% of payroll errors. 14% of small businesses still process payroll manually. As a result, using automated methods reduces the possibility of human error. Ensure that the payroll is correct and timely. Manual processes are error-prone and take a significant amount of time for HR management.
2. Time Saving: Did you know? According to the latest statistics by G2 , Businesses spend an average of 120 hours (about 10 days) per year on payroll. The stats suggest that companies that use payroll automation are 33% more effective. Automation helps to streamline payroll tasks and reduces errors, helping businesses save time and money. Here is another good reason to opt for an automated payroll system.
3. Conformity: Some payroll software's have an excellent feature to keep informed about labor laws and tax regulations to reduce legal dangers. Using an automated payroll software HR can stay updated with the latest Indian labor laws. Compliance is not an easy job; a simple mistake can create a blunder. To avoid such things a payroll software lets you create custom salary components according to your workforce and which are compliant according to the Indian labor laws.
4. Employee Satisfaction: Your workforce is the backbone of your business. The workforce stays motivated and shows productivity if they get paid on time and accurately. Most of the payroll software's come along with employee self-service applications. This application will help employees to carry out their payroll related activities such as downloading salary slips, checking tax declarations, updating personal information and much more! This eliminates the interference of HR department and lets the employee oversee their own payroll activities.
5. Information Safety: Payroll software contains sensitive information about your employees such as personal details, bank account details, government IDs such as Adhaar card & PAN details. Also choose the payroll software which is trustworthy and contains top-notch security for protecting your data. Make sure the payroll software is compliant with the international security standards before you make a purchase.

Types of Payroll

In general, payroll systems can be categorized into three main groups:

1. Manual Payroll: Businesses with small employees can get benefits from manual payroll to some extent. HR professionals manage payroll with the help of in-house using basic software or even spreadsheets. While this approach keeps costs low and gives you full control of the payroll operations, it requires keeping up with tax laws and doing all calculations. However, as your business grows, this option can become tedious and also make it prone to errors.
2. Professionally Managed Payroll: Outsourcing your payroll tasks to a bookkeeper or CPA could be an ideal solution if you would like to get rid of this burden without losing control. They take care of the calculations, deductions and compliance so that you can devote more time to human resources strategy. Though this option provides expert management access, it does have some additional expenses in your budget.
3. Outsourced Payroll: For larger businesses, fully outsourced payroll to a service provider offers comprehensive management. Service providers take care of everything from wage payments, tax filings, and compliance with regulations, so you don’t have to worry about the details. This service saves you time and reduces errors, though it does come with higher costs and less control over administrative tasks.
4. Automated Payroll: As companies of all sizes start to strive for efficiency, in such cases automated payroll software is becoming more and more sought after. It merely requires HR to enter information about their workers, and then the software calculates salaries and files taxes automatically, among other things. A system based on the cloud allows you easy access to payroll from anywhere at any time, therefore mistakes are reduced due to automation. Although this option makes it easier for you, regular updates of the information will be necessary.

Why would you need the automated payroll?

As a HR professional you understand that having a smooth payroll process is beyond timely payments and tax deductions, it's about cultivating a work environment where employees can feel sense of satisfaction without need to worry about incorrect deduction in salary or missing out their overtime payments.

If your employee feels well satisfied it will reflect in his work and therefore a rise in productivity, which will eventually contribute to fulfilling business goals. Switching from manual to automated payroll not only benefits HR managers but also makes your employees happier.

Don’t let outdated payroll processes slow you down!

Wrap up

Do not let the myth that small or medium businesses may not need payroll software get to you, as the business environment is ever changing and let’s be honest who wouldn’t want to have better employee productivity and a more focused strategic HR workforce. Implement latest technologies to enhance your overall work culture and provide the best for your workforce.

If you would like to explore the India's fastest growing payroll software Runtime HRMS – click here and book a free demo with our experts to eliminate your payroll problems.